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Investment/taxation/redistribution model criticality

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  • Paulo Murilo Castro de Oliveira

    (Instituto de Física, Universidade Federal Fluminense
    Instituto Nacional de Ciência e Tecnologia – Sistemas Complexos)

Abstract

An agent model with annual wealth investment and taxation presents a critical phase transition when one crosses the frontier regressive/progressive taxation. For the regressive case the final destiny of the society is a collapsed configuration in which all population wealth eventually remains in hands of a single agent, an absorbing state spontaneously breaking the symmetry among agents. For progressive taxation, the dynamic process continues forever with fluctuating wealths distributed among all agents; symmetry is not broken. The order parameter is the average m = −⟨logw1⟩, where w1 is the wealth share of the richest agent, vanishing at the collapsed phase. A parameter p controls the taxation progressiveness (p > 0) or regressiveness (p

Suggested Citation

  • Paulo Murilo Castro de Oliveira, 2020. "Investment/taxation/redistribution model criticality," The European Physical Journal B: Condensed Matter and Complex Systems, Springer;EDP Sciences, vol. 93(10), pages 1-6, October.
    • Handle: RePEc:spr:eurphb:v:93:y:2020:i:10:d:10.1140_epjb_e2020-10308-x
    DOI: 10.1140/epjb/e2020-10308-x
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    Statistical and Nonlinear Physics;

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